Tuesday, April 8, 2014

Rumours have emerged of a
Trillion Euro Quantitative Easing (QE) package that is to be made available to
fight both deflation and unemployment in the Euro zone, and in the EU in
general. Such a development would place considerable strain on the ability of
the Single Currency to remain as resilient as it has been against its major
counterparts around the world.

However, our sources in Brussels, home of the EU
Commission, tell us that this package has become mired in the infighting that
can often become apparent between that same Commission and the European Central
Bank (ECB).

The politicians are bracing
for a kicking from the electorates in the various EU member states in the
upcoming European elections and would, therefore, welcome a development like QE
as it might give them some support with the voters.

Our source tells us that the
relations between Brussels and Frankfurt,
where the ECB is based, have become so strained that the Central Bank could
hold off implementing the package until after the elections for the very reason
that it might actually be of assistance to the incumbent politicos.

Our source also says “…the
good old Bundesbank would not be that happy with QE, despite what Weidmann [Jens, Bundesbank president] (sort of)
said last week - they may give it a very slight nod but would not be up for it
long term - they hate inflation!”

Later in the morning a strong
UK
manufacturing report produced a surge in the pair, which seems to have the
potential to bring it into completely new price territory to the upside.

We had initiated our
Mandelbrot routine on the GBPUSD instrument and, using its proprietary
algorithm, it entered a position, at the level shown in the chart. This trade is already in profit to the tune of 1% of equity.